Buying a home for the first time is an exciting milestone, but with mortgage rates still high and home prices near record levels, it’s also one of the most financially challenging times in recent memory to break into the market.
According to Bankrate, the median age of a first-time homebuyer in the U.S. is now 38, the oldest it’s ever been. Fewer than 30% of all home sales currently go to first-time buyers.
Many are struggling to save for a down payment, get approved for financing, or find homes within their price range. But experts say there are resources available that could make homeownership more possible than many realize.
Matt Nawrocki, a prospective first-time buyer in Scottsdale, Arizona, has rented his entire adult life. He says he’s appreciated some of the conveniences of apartment living.
“One of the biggest things that I like about apartment living is the fact that you have a landlord who can take care of issues,” Nawrocki said. “Also, in my experience, it seems like I can get closer to the action with apartment living.”
But now, at 36, he’s ready for something more permanent.
“I just want to be able to lock in my costs,” he said. “I’d also like to be able to have cookouts. I’d like to plant roots here on a more permanent basis.”
That decision hasn’t come quickly or easily. Nawrocki has spent years saving and studying his options. Like many others, he’s finding that buying in today’s market requires patience, planning, and strategy.
“This has been a journey that’s taken me years to get to this point,” he said.
Jeff Ostrowski, a Bankrate housing market analyst, says Nawrocki’s experience is far from uncommon.
“For first-time homebuyers, it’s a very difficult time,” Ostrowski said. “There’s this one-two punch: home prices are at record levels, and then mortgage rates are elevated.”
But he stresses that help is out there for those willing to do the research.
“I would very much recommend that first-time buyers research down payment assistance programs,” he said. “Every state in the country has some sort of Housing Finance Authority that offers down payment assistance.”
The average amount of help available nationwide is about $18,000, according to Bankrate. But in higher-cost markets, some buyers are qualifying for $100,000 or more in assistance by combining—or “stacking”—multiple programs. That could include options from state and local governments, federal sources, conventional loans, employers, and nonprofits.
Some of the most popular assistance tools include FHA loans, which are backed by the Federal Housing Administration. These loans are typically easier to qualify for with a lower credit score and require just 3.5% down. Veterans or active-duty service members may qualify for a VA loan, which can offer zero-down financing, as can USDA loans for homes in qualifying rural areas.
“You have to come up with less for a down payment,” Ostrowski explained. “It means you're borrowing less. It means it’s easier to qualify. So it just has a whole cascading effect of benefits.”
If you're thinking about buying your first home, Ostrowski recommends starting with a few key steps:
- Check your credit score
- Get pre-approved for a mortgage
- Compare loan types
- Research local, state, and federal grants
- Take a certified first-time homebuyer education class
“If you have excellent credit, you can qualify for top-tier rates,” Nawrocki said.
While he’s still weighing his options, Nawrocki says he’s closer than ever to making the leap to homeownership.
“It would be quite nice to be able to have my own place to call my own.”
With the right resources and a bit of determination, experts say homeownership may be more within reach than it seems.
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